What 'Fiscal Cliff?': Stocks rally on budget optimism

A trader applauds while working on the floor of the New York Stock Exchange on Feb. 21, 2012, when the Dow Jones Industrial Average broke through the 13,000 barrier.

What "fiscal cliff?" That was the sentiment on Wall Street Monday as the Dow Jones Industrial Average rallied nearly 208 points on positive housing data and growing optimism over the current budget talks between Democrats and Republicans.

The market had fallen sharply over the past two weeks on fears the two would not be able to reach a compromise on a number of spending cuts set for Jan. 1., USA TODAY reported.

Attention remains centered on the fiscal cliff," said Michala Marcussen, global head of economics at Societe Generale told TheStreetl.com. "Recent developments give grounds for some cautious optimism, but history suggests that politics can be notoriously fickle."